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The Week Ahead: Difficult Times For Sembcorp Industries

The Singapore earnings season will step up a gear next week with results from a quartet of Singapore heavyweights.

Most eyes will be on the two Sembcorps, namely Sembcorp Marine (SGX: S51) and Sembcorp Industries (SGX: U96), following the disappointing numbers from Singapore conglomerate Keppel Corporation (SGX: BN4).

In August, Sembcorp Industries posted a 23% fall in revenues, while net profits dropped 61%. The company also said the market environment remains “difficult”. The numbers at Sembcorp Marine were just as bad, if not worse. It said revenues slipped 25%, while profits slid almost 90%.

Banks will also be in focus next week with results from Oversea-Chinese Banking Corporation (SGX: O39) and United Overseas Bank (SGX: U11). In July, OCBC said second-quarter profits fell 15%. But it held its interim dividend, which could augur well for the future. UOB also left its interim dividend unchanged, after it posted a 5% improvement in net profit for the second quarter in July.

On the economic front, America will report GDP numbers for the third quarter at the end of next week. In the second quarter, the US economy expanded at an annualised rate of 1.4%, which was better than the rate of expansion in the first three months of the year. US growth, whilst positive, is still below the long-run average of around 3%, though.

Japan will report inflation numbers. After six consecutive months of falling consumer prices, it is hard to see how the decline could be stemmed. It is also hard to envision how the rate inflation can ever reach the Bank of Japan’s target of 2% any time soon.

Singapore will report inflation numbers too. After 22 months of declines, consumer prices might be about to turn. In August the Consumer Prices Index only fell 0.3% compared to a 0.7% drop in July. Singapore will also report unemployment numbers for the third quarter. In the June quarter, the jobless rate of 2.1% was the highest for four year.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore Director David Kuo doesn’t own shares in any companies mentioned. The Motley Fool Stock Advisor Gold service has recommended United Overseas Bank.